BIDU(US:BIDU) Zhao Yin Guo Ji·2024-09-26 08:03Investment Rating - The report assigns a "Buy" rating to Baidu (BIDU US) with a target price of $180.50 per ADS [1]. Core Insights - The 2024 Cloud Intelligence Conference highlighted Baidu's advancements in AI infrastructure, including the upgrades to the Baidu AI Heterogeneous Computing Platform 4.0 and the Qianfan Large Model Platform 3.0, which aim to enhance the industrialization of large models and improve enterprise productivity [1]. - Baidu's cloud business is expected to benefit from the growth in GPU cloud services, with revenue growth anticipated to steadily recover due to a leading infrastructure and technology position, as well as the cross-selling of CPU cloud services [1]. - The valuation of Baidu is based on a Sum of the Parts (SOTP) approach, with the cloud business valued at $32.2 per ADS, contributing 17.8% to the overall target valuation [1]. Summary by Sections - Company Overview: Baidu is focusing on enhancing its AI capabilities through significant upgrades to its computing platforms and applications, which are expected to drive growth in its cloud business [1]. - Market Position: The company is well-positioned to capitalize on the increasing demand for GPU cloud services, which is projected to lead to improved revenue and profit margins [1]. - Valuation Metrics: The target price of $180.50 per ADS reflects a strong outlook for Baidu's cloud business, with specific emphasis on the contribution from GPU services [1].